🧑Successful traders believe that the exit point is more important than the entry point, because it is the factor that determines whether you make a profit or a loss. Most new traders will not know how to determine the profit target or stop loss point for their strategy while this is extremely important when participating in trading👇👇.
This article will share with traders some important things in determining the appropriate exit point.
🔥Let profits run until the trend is exhausted
💥Taking profits early will not help you get a good risk-reward ratio, but sometimes it will also cause the fear of losing profits to develop. In the long run, if you want to make a profit, you must learn how to increase profits and earn big profits.
Of course, you can't let profits run in all cases. Only in conditions where the trend has good momentum and is likely to continue, will holding profits be effective.
And we will not keep this profit running forever, we must know its stopping point. There are many ways to determine when to take profit according to the trend. Some traders use momentum, some use moving averages, some use market structure, and some use important support and resistance levels.
🔥Important support resistance
Important support resistance are price zones that traders need to pay attention to when exiting orders. These price zones when the market approaches will have the possibility of reversal, many traders monitor these price zones.
The larger the support and resistance on the time frame, the more important and reliable it is. When the market approaches them, the possibility of a reversal is higher, so when trading, traders need to pay special attention to support and resistance on the larger time frame. These are very potential and easily recognizable exit and profit zones on the chart.
🔥Make a list of the reasons you exit a trade
💥This is very necessary, successful traders have many different exit strategies, they will flexibly use them in trading. We should never exit orders based on emotions, there must always be a reason for you to exit your orders. Here are a few reasons:
Price hits stop loss
Closing price broke out of the 200 SMA.
Price breaks important support in an uptrend or important resistance in a downtrend.
A sudden increase or decrease in price, 5 times the normal price movement. This could be a market push before a reversal.
There is important news about to be announced.
Of course, each system will have additional technical signs for you to rely on to decide whether to exit the order or not, but you need to know that the more technical signs supporting you to exit the order, the better.
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